Almost €9bn home retrofit plan a daunting ‘challenge’

Existing energy support schemes not geared to meet climate-action and government targets

Government intervention is needed to overcome market failures that could lead to otherwise sub-optimal take-up,  notes a departmental report. File photograph: Getty

Government intervention is needed to overcome market failures that could lead to otherwise sub-optimal take-up, notes a departmental report. File photograph: Getty

 

The plan to spend €8.7 billion on 500,000 deep retrofits, along with installing 400,000 renewable heat systems in homes, is “one of the most challenging infrastructure projects in the history of the State”, according to a Department of Public Expenditure report.

Existing energy efficiency support schemes operated by the Sustainable Energy Authority of Ireland (SEAI), while of net benefit to society, are not sufficiently geared towards achievement of programme for government and climate action plan targets, the review finds.

New schemes are needed and, given the significant level of exchequer funding envisaged, “extremely careful consideration will be required in their design and operation”. It is not clear what level of investment is needed to achieve the desired BER-B2 energy rating in a home, it notes. An average figure “disguises considerable variability in the cost that might be faced by an individual homeowner”.

The massive retrofitting programme is due to be funded with €3.7 billion allocated under Project Ireland, complemented with €5 billion from carbon tax revenues.

To achieve such ambitious targets “a significant scale-up in resources in terms of funding and human capital to support this increase in activity” is required, concludes the Spending Review 2020 report by James Reddy of the department’s Climate Change Unit.

This uncertainty is also mirrored in energy and emissions savings experienced in each home. “More research on this variability is necessary to underpin future energy efficiency schemes,” it notes.

The programme for government commits to “part-fund a socially progressive national retrofitting programme targeting all homes but with particular emphasis on social and low-income tenancies”.

Some €222 million was provided in the budget for expanding SEAI retrofit programmes, while the Department of the Environment is completing arrangements for a one-stop-shop approach to a national retrofit programme, including deployment of heat pumps, solar panels and home insulation, to be launched in coming months.

“Given the level of emissions caused by the national housing stock, it is evident that the State must make significant efforts to tackle the carbon intensity of the sector,” the report says.

Funding structures

Financial limitations are the key barrier to uptake by householders, it says, including high up-front costs, issues around availability of grants, long-term payback periods and complex funding structures.

“The majority of households are unaware and uninformed of the benefits that energy efficiency upgrades bring. Technical difficulties and the disruption caused by energy efficiency works also contribute towards the low rate of deep retrofit implementation.”

Government intervention is needed to overcome market failures that could lead to otherwise sub-optimal take-up, it says.

The climate action plan requires a roadmap on the optimum mix of taxation, regulatory, subsidy and financing policies to stimulate demand and supply in the energy-efficiency market for the next decade. The report expects this will be progressed in tandem with a review of the National Development Plan.